Franklin Company deposits all cash receipts on the day they are received and makes all cash payments by check. At the close of business on August 31, its Cash account shows a debit balance of $13,162. Franklin's August bank statement shows $14,237 on deposit in the bank. Determine the adjusted cash balance using the following information:
$$\begin{array} { | l | r | }
\hline \text { Deposit in transit } & \$ 4,500 \
\hline \text { Outstanding checks } & \$ 3,900 \
\hline \text { Bank service fees, not yet recorded by company } & \$ 50 \
\hline \text { The bank collected on a note receivable, not yet recorded by the company } & \$ 1,725 \
\hline
\end{array}$$ The adjusted cash balance should be:

Question

Franklin Company deposits all cash receipts on the day they are received and makes all cash payments by check. At the close of business on August 31, its Cash account shows a debit balance of $13,162. Franklin's August bank statement shows $14,237 on deposit in the bank. Determine the adjusted cash balance using the following information:
$$\begin{array} { | l | r | } 
\hline \text { Deposit in transit } & \$ 4,500 \
\hline \text { Outstanding checks } & \$ 3,900 \
\hline \text { Bank service fees, not yet recorded by company } & \$ 50 \
\hline \text { The bank collected on a note receivable, not yet recorded by the company } & \$ 1,725 \
\hline
\end{array}$$ The adjusted cash balance should be:

Quizplus · Accepted Answer

The adjusted cash balance is found by taking the balance per bank statement ($14,237) and adding deposits in transit ($2,000) while subtracting outstanding checks ($400).

Adjusted cash balance = $14,237 + $2,000 - $400 = $14,837.

Franklin Company Deposits All Cash Receipts on the Day They